World Bank Blogshttp://blogs.worldbank.org/planet.xml
IBRD and IDA: Working for a World Free of Poverty.enWomen’s jobs at risk from tech disruptionhttp://blogs.worldbank.org/jobs/women-s-jobs-risk-tech-disruption
<em>Samantha Amerasinghe, a guest blogger, is an economist for the Thematic Research team at Standard Chartered.&nbsp;</em>
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<img alt="" height="424" src="https://blogs.worldbank.org/jobs/files/jobs/gender-employment-tech.jpg" title="" width="650" />
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Giving women access to the skills and qualifications in areas where jobs will be created is vital. Photo: Dominic Chavez/ World Bank</figcaption>
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<p>
Dubbed the ‘fourth industrial revolution’, technology disruption could be a key growth driver for economies over the coming years. But for women, advances in technology also pose a threat, as many of their jobs could be displaced. A perfect storm of technological trends, from mobile internet and cloud technology to ‘big data’ and the ‘internet of things’, means that, as new work trends evolve, existing gender inequalities could worsen further.</p>
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<p>
Why is this? The World Economic Forum’s <a href="http://www3.weforum.org/docs/WEF_Future_of_Jobs.pdf" rel="nofollow">The Future of Jobs </a>report finds that the jobs most at risk are those that can be automated easily. This includes roles with the largest share of female employees such as office and administrative jobs. However, jobs with the highest gender imbalances are also at risk. These included jobs in architecture, engineering, computer science, maths and manufacturing, sectors, which traditionally employ more men than women.<br />
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According to the report, disruptive technologies, including robots and artificial intelligence, will cost <a href="http://www3.weforum.org/docs/WEF_Future_of_Jobs.pdf" rel="nofollow">5.1 million jobs net by 2020 in fifteen of the world’s largest economies.</a> These countries – including China, India, Japan, South Africa, Turkey, the UK, the US and Brazil – account for 65 percent of the global workforce.<br />
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The weight of the job losses falls almost <a href="http://www3.weforum.org/docs/WEF_Future_of_Jobs.pdf" rel="nofollow">equally on women (48 percent) and men (52 percent)</a>. But as women make up a smaller share of overall jobs – <a href="http://www3.weforum.org/docs/WEF_Future_of_Jobs.pdf" rel="nofollow">on average, 54 percent of women work, compared with 81 percent of men</a> – the impact will be greater on them.<br />
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Our analysis of this report shows that in absolute terms, men stand to gain one job for every three jobs lost to technology advances, while women are expected to gain one job for every five or more jobs lost. These figures are based on our analysis of the statistics for disproportionate job losses from the World Economic Forum’s Future of Jobs Survey results.&nbsp;<br />
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Some of these job losses could be partially offset by emerging roles in science, technology, engineering and mathematics (STEM). But currently, these roles are very male-dominated. <a href="http://www3.weforum.org/docs/WEF_Future_of_Jobs.pdf" rel="nofollow">Women are expected to gain only one new STEM job per 20 jobs lost from technological disruption, while men are set to gain nearly one new STEM job for every four jobs lost.</a><br />
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Worryingly, there has been a slowdown globally in closing the gender gap in recent years. As women are under-represented in the fast-growing STEM jobs, based on current trends, this suggests a worsening gender gap over time. Expanding access to secondary and higher education with an emphasis on STEM will be critical if we are to see improvements in the quality of work for women.<br />
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There is also a need to address sectoral and occupational segregation, and the gender wage gap. We also need to make critical changes to workplace policies and procedures while improving access to finance through subsidies and grants to ensure that women do not lose out on the transition to digital jobs. Below are policy suggestions for achieving this.</p>
<strong>Tackling the root causes and sectoral and occupational segregation</strong>
<ul>
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Encouraging young girls and boys to break gender stereotypes through education and outreach</li>
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Offering training to women and men to enter into non-stereotypical fields</li>
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Promoting women’s entrepreneurship</li>
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Supporting women’s participation and leadership in decision-making incl governments, employers’ and workers’organisations</li>
</ul>
<strong>Addressing the gender wage gap</strong>
<ul>
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Eliminating unequal treatment of men and women in the labour market</li>
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Promoting equal pay for work of equal value through wage transparency, training and gender neutral</li>
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Supporting adequate and inclusive minimum wages and strengthening collective bargaining</li>
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Promoting and normalizing good quality part-time work</li>
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Limiting long paid hours and overwork</li>
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Transforming institutions to prevent and eliminate discrimination</li>
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Changing attitudes towards unpaid care work</li>
</ul>
<strong>Implementing a comprehensive framework to achieve the harmonisation of work and family responsibilities </strong>
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Providing maternity protection to all women according to international labour standards</li>
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Guaranteeing adequate social protection to recognize, reduce and redistribute unpaid care work</li>
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Implementing gender-transformative leave policies: increasing leave entitlements for fathers and boosting their take-up rates</li>
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Making quality early childhood care and education a universal right</li>
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Promoting family-friendly flexible working arrangements</li>
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Encouraging individual income taxation to increase women’s labour force participation</li>
</ul>
Few would disagree that technology advancement has its benefits. Its transformative power means a future with new opportunities and limitless possibilities. However, women stand to lose as they are less likely than men to be working in areas where the adoption of technology will create jobs.<br />
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For the sake of future global growth, it’s vital to give women access to the skills and qualifications in areas where jobs will be created. &nbsp;The World Bank estimates that closing the gender gap could add <a href="http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/EXTWDRS/EXTWDR2012/0,,menuPK:7778074~pagePK:7778278~piPK:7778320~theSitePK:7778063~contentMDK:22851055,00.html" rel="nofollow">an additional $1.2 trillion to the U.S.’s GDP and $2.5 trillion to China’s GDP by 2020.</a> The rewards of getting it right can be huge.<br />
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<em>Follow the World Bank Jobs Group on Twitter <a href="http://www.twitter.com/wbg_jobs" rel="nofollow">@wbg_jobs</a>.</em>Wed, 07 Dec 2016 15:25:00 -0500Samantha AmerasingheFor the differently abled by a differently abled – an inspiration from Tamil Nadu, Indiahttp://blogs.worldbank.org/endpovertyinsouthasia/differently-abled-differently-abled-inspiration-tamil-nadu-india
During my recent mission visit to Sivagangai District in Tamil Nadu, India, I met with Mr. Kannan, a social entrepreneur. I was visiting communities to understand the latest efforts under the <a href="http://projects.worldbank.org/P079708/tamil-nadu-empowerment-poverty-reduction?lang=en&amp;tab=overview" rel="nofollow">Tamil Nadu Empowerment and Poverty Reduction Project (TNEPRP)</a> to support the differently abled with economic activities following their identification and mobilization. For six months now, Mr. Kannan is running a Community Skills School (CSS), an innovative approach to skills enhancement, in the Kalaikulam Village. At the school, which provides self-identified and motivated trainees with skills to repair home appliances, Mr. Kannan has already trained 70 differently abled men and three women. Among the trainees is his wife, who is differently abled herself, but is of huge support to Mr. Kannan in running the CSS and in working with women.<br />
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He has an agreement with TNEPRP to train a total of 180 differently abled, including a planned group of 30 women.
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<img alt="Mr. Kannan, a differently abled social entrepreneur" height="427" src="https://blogs.worldbank.org/endpovertyinsouthasia/files/endpovertyinsouthasia/kannan.jpg" title="Mr. Kannan, a differently abled social entrepreneur" width="320" />
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<em>Mr. Kannan, a differently&nbsp;abled social<br />
entrepreneur. (Photo:&nbsp;Varalakshmi Vemuru)</em></figcaption>
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Run on a guild program model, the CSS ensures that upon completion of a one-month program on skills enhancement, the trainees can become self-employed or work in small enterprises repairing home appliances in their own and neighboring villages. The rapid urbanization of rural Tamil Nadu offers plenty of such opportunities.<br />
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Mr. Kannan designed the key aspect of the curriculum—which goes beyond technical training—based on his own life experiences. During our conversation, I found out that Mr. Kannan is differently abled himself—he was afflicted with polio at the age of three and has lost the use of both his lower limbs. As a result, Mr. Kannan needed a wheelchair to get around. Nevertheless, he was not deterred and continued his education to receive a diploma in mechanical engineering from a local Polytechnic. He ended up at Samsung’s service center in Chennai, the state capital, where he spent four years acquiring skills in home appliance repair.&nbsp;<br />
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After returning to his native village, Mr. Kannan opened two highly successful service centers repairing home appliances. He employed two differently abled friends, teaching them how to do repair work. This kindled in him the drive to support many others, and thus began the partnership with TNEPRP. While designing the curriculum, he put together modules on personality development, motivation, life skills, and customer relations management—things he learnt were complementary to technical training and crucial for the differently abled given their marginalization. Other key support mechanisms include on-call help from himself and a WhatsApp group where the trainees can seek help with difficult repairs and share experiences with each other. In addition, he provides a kit of tools for each trainee, to help them start off immediately upon completion of the program. All this to ensure that trainees start businesses successfully, sustain them, and expand their customer base.
<div style="padding-bottom:0px; width:210px; float:left; height:165px; margin-right:8px">
<img alt="" height="118" src="https://blogs.worldbank.org/voices/files/voices/sustainable_communities_v2-200-low.jpg" style="border:1px solid #fff !important;" title="" width="200" /><br />
<img alt="" height="5" src="https://blogs.worldbank.org/sustainablecities/files/sustainablecities/teal-square-resized-high.png" style="border:1px solid #fff !important;" title="" width="12" /><strong><a href="http://blogs.worldbank.org/voices/introducing-our-new-sustainable-communities-blog-series" style="color: #3bb3bc; font-size: 12px; text-decoration: none" target="_blank">About this series</a></strong><br />
<img alt="" height="5" src="https://blogs.worldbank.org/sustainablecities/files/sustainablecities/teal-square-resized-high.png" style="border:1px solid #fff !important;" title="" width="12" /><strong><a href="http://blogs.worldbank.org/category/tags/sustainable-communities" style="color: #3bb3bc; font-size: 12px; text-decoration: none" target="_blank">More blog posts</a></strong></div>
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After the first two groups of day-trainees, Mr. Kannan requested for project support to include a residential facility, since the differently abled faced great mobility challenges traveling long distances every day, especially by public transport. In addition, Mr. Kannan is now starting to set up an assembly center of electrical and electronic equipment, in partnership with leading private firms, to provide employment opportunities to many local differently abled youth trained by him.<br />
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<img alt="Mr. Muthu, a beneficiary and successful entrepreneur who suffers from low vision" height="255" src="https://blogs.worldbank.org/endpovertyinsouthasia/files/endpovertyinsouthasia/muthukannan.jpg" title="Mr. Muthu, a beneficiary and successful entrepreneur who suffers from low vision" width="340" />
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<em>Mr. Muthu, a beneficiary and successful entrepreneur<br />
who suffers from low vision. (Photo: Varalakshmi Vemuru)</em></figcaption>
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The TNEPRP design specifically focuses on the differently abled as part of its inclusive approach and “participatory identification of the poor”. First, it aims to identify and support medical treatment for the differently abled, followed by their social and economic empowerment. In the past decade, TNEPRP has reached over 175,000 differently abled, with both physical and mental disabilities, making it one of the largest World Bank-supported operations on social inclusion of the differently abled. As the implementation of TNEPRP comes to a close in June 2017, the World Bank is supporting the Government of Tamil Nadu to prepare the Tamil Nadu Rural Transformation Project (TNRTP), which will build on the strong social mobilization and institutional architecture of TNEPRP. The TNRTP will focus on propelling the rural economy in Tamil Nadu by smoothing entry barriers for individuals and community livelihood groups to access skills, technology, finance, and technical assistance to promote self-employment, individual and group enterprises, and skilled workforce particularly among women, the youth, and differently abled.Fri, 02 Dec 2016 11:21:00 -0500Varalakshmi VemuruWhen good transport alone doesn’t bring jobs closer to women: insights from Mexico Cityhttp://blogs.worldbank.org/transport/when-good-transport-alone-doesn-t-bring-jobs-closer-women-insights-mexico-city
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<img alt="" height="375" src="https://blogs.worldbank.org/transport/files/transport/mx-woman-in-metro-gary-denness-flickr.jpg" title="Gary Denness/Flickr" width="665" />
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Photo: <a href="https://www.flickr.com/photos/garydenness/4986792119/">Gary Denness/Flickr</a></figcaption>
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[[tweetable]]An affordable, safe, and good-quality transport system brings social and economic value to everyone[[/tweetable]], and is key to increasing access to services and opportunities. But is it enough to bring women closer to jobs?<br />
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A <a href="http://blogs.worldbank.org/transport/are-women-forced-work-closer-home-due-other-responsibilities-does-contribute-gender-wage" rel="nofollow">World Bank study in Argentina</a> highlighted that women “have more complex travel patterns, travel more, and have more travel needs at off-peak hours, which are often not related to work and associated with fixed destinations (e.g. child care).” As a result, they are constrained to smaller commutes and, by association, fewer employment opportunities. In addition to using public transport at different times, frequencies, and for alternate purposes, data from other countries also indicates that [[tweetable]]many women face significant security challenges when using public transport[[/tweetable]].<br />
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To dig deeper on this and identify what kind of complementary interventions could help ensure mass transit investments bring women the best accessibility benefits, we conducted preliminary research in Mexico City with support from the World Bank Youth Innovation Fund.<br />
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Our primary objective was to figure out what encourages or inhibits women’s use of mass transit systems, and to understand how these systems influence their decisions to find employment or <em>better</em> employment.<br />
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We organized interviews with two distinct groups:
<ul>
<li>
Women who lived on the outskirts of Mexico City but worked in the city center, commuting at least an hour [each way] to cover the long distances between their homes and their jobs</li>
<br />
<li>
Women of similar ages, skill and educational levels who lived and worked near their homes in the peripheral community of Tláhuac</li>
</ul>
Though more rigorous analysis is needed to confirm the results of our exploratory work, some clear priorities emerged from our interactions with the women of Mexico City – priorities that seem consistent with the broader knowledge base on gender issues:
<ol>
<li>
<strong>Empower women in the poorest areas to become more comfortable with the transit system. </strong>When engaging with women in Tláhuac, we quickly realized that <strong>fear of the unknown and lack of information</strong> was a big hurdle to using mass transit and accessing employment opportunities. This could be addressed, in part, through outreach programs regarding cost, scope, and safety, as well as through programs that would enable women to assert greater control in their lives and have an impact on the transport system (e.g. grievance redress mechanisms, safety and quality service feedback loops). One inspiring example is the <a href="http://bikeanjo.org/" rel="nofollow">Bike An Jo</a> program in Sao Paulo, where voluntary cyclists accompany new cyclists to find a route, get information about the traffic, and move around the city.</li>
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<li>
<strong>Raise awareness of job opportunities. </strong>Many women we spoke with were not fully informed of the employment opportunities available downtown, or did not know how to avail of them. Employment information campaigns, career services, and training programs could go a long way in bridging this skills and information gap, and would certainly inspire more women to pursue higher-paying jobs downtown.</li>
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<strong>Make childcare readily available. </strong>The women in our Tláhuac focus group had an average of three children, and frequently mentioned the<strong> lack of child care services</strong> as one of the main factors forcing them to work from home or nearby. In light of this, [[tweetable]]readily available childcare services is essential to freeing up women’s time to access jobs[[/tweetable]]—a finding that was also highlighted by the World Bank in its new <a href="http://documents.worldbank.org/curated/en/820851467992505410/pdf/102114-REVISED-PUBLIC-WBG-Gender-Strategy.pdf" rel="nofollow">Gender Strategy</a>. In addition, interventions that engage fathers in good parenting have also shown good results to equilibrate household responsibilities (Chile <em><a href="http://www.crececontigo.gob.cl/empapate/" rel="nofollow">Empapate</a></em>).</li>
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<strong>Improve security throughout the public transit system.</strong> When it comes to personal security, transport systems in Mexico rank as the second most dangerous in the world. Female commuters are disproportionately affected; in fact, data shows 50% of women have been victims of sexual harassment in public transport. For women in Tláhuac, for instance, riding transit to the city center—where they make on average three times as much—also means exposing themselves to the very real risk of assault or robbery. This trade-off between economic opportunity and personal security is simply unacceptable.</li>
</ol>
These preliminary findings make it clear that, if we’re serious about minimizing the barriers to female employment, [[tweetable]]safe, affordable, and high-quality public transport needs to be accompanied by a number of support systems[[/tweetable]]. That includes addressing issues like personal security, social and gender norms, awareness of services, and the belief in one’s own capacity to succeed. We are looking forward to deepening our work on these issues through our projects where we will be analyzing women’s mobility in Latin American and African cities.<br />
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[[tweetable]]In your own country, what opportunities or challenges do women face on their commute to work?[[/tweetable]]Thu, 01 Dec 2016 16:37:00 -0500Karla Dominguez GonzalezMaking the future of work more inclusive and equitablehttp://blogs.worldbank.org/jobs/making-future-work-more-inclusive-and-equitable
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<img alt="" height="430" src="https://blogs.worldbank.org/jobs/files/jobs/futureof_work.jpg" title="" width="650" />
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Public policies could shape how the costs of digitization can be managed, to counter inequality and mitigate the costs for the poorest. Photo: Dominic Chavez/World Bank</figcaption>
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<p>
There is much speculation about what share of jobs might be automated by increasingly smart machines. One&nbsp;<a href="http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf" rel="nofollow" target="_blank">estimate</a>&nbsp;suggests that countries such as the U.S. would see almost half of today’s jobs disappearing, while another&nbsp;<a href="http://www.oecd-ilibrary.org/social-issues-migration-health/the-risk-of-automation-for-jobs-in-oecd-countries_5jlz9h56dvq7-en" rel="nofollow" target="_blank">estimate</a>&nbsp;suggests that this might be just about one in ten jobs. But less is known about who will lose their jobs due to these transitions. And more critically, what might happen to the bottom 40 percent of the population of emerging countries that have only recently been exposed to basic digital technologies? Will they gain from technological progress, or will they face the negative effects of both exclusion and of others—countries or the better off—pulling ahead?</p>
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<p>
It is tempting to think of robots and artificial intelligence taking over, but even mature technologies such as mobile phones or Internet connectivity are only partly diffused (and at varying quality) across the world. As late as 2014, one hundred and forty-five countries had less than half of their population using the Internet.&nbsp;Hence, emerging economies could experience a future of work where the opportunities are constrained due to limited technological adoption by employers and workers. But the risks are out sized due to technology access and skills divides when compared to the advanced economies, weaker enabling environments, and different labor market characteristics. Put another way, the risk of deepening inequality across and within countries is significant.<br />
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Levels of technology access and skills in the emerging countries often lag the advanced economies. The table below illustrates the divides for different types of technologies across different country types. It shows that while technology will shape the labor market through similar channels in emerging economies as in the advanced economies, the extent and intensity of effects will differ.<br />
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<img alt="" height="242" src="https://blogs.worldbank.org/jobs/files/jobs/future-of-work-blog.jpg" title="" width="629" /><br />
Divergences exist within individual countries as well. Typically, major cities and towns are online, but most rural or remote communities are not, or face higher prices or poorer quality services. Divisions also exist across different demographic groups. Women, people with disabilities, social and ethnic minorities, and older people lack the same level of access to <a href="http://www.worldbank.org/en/publication/wdr2016" rel="nofollow">digital technology</a>.<br />
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The people who are part of the poorest and most vulnerable groups—the bottom 40 percent in terms of income distribution—are the least likely to benefit from these technologies. Coincidentally, these are the very groups that would likely benefit the most from being able to use these tools. Similarly, many businesses in rural areas cannot access these technologies.<br />
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This means there is inequality in <a href="http://www.oecd.org/eco/the-future-of-productivity.htm" rel="nofollow">productivity</a>, <a href="http://www.nber.org/papers/w19010" rel="nofollow">incomes</a>, and opportunities for good job creation. And if the speculation about job losses due to digitization do play out, then the concern for policymakers will be about how to create new channels for income generation and inclusion, especially for the poorest.<br />
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<strong>Policies to make the future of work more inclusive and equitable</strong><br />
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Public policies could position countries better to overcome lags in digitization. They could shape how the costs of digitization can be managed, to counter inequality and mitigate the costs for the poorest. Doing so could make the future of work more inclusive and equitable.<br />
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For this, two sets of public strategies are needed. First, to address bottlenecks in technology access and to build the capabilities of businesses and individuals, especially the bottom 40. Second, the bottom 40 will need support through the transition. initial experiments suggest at least three possible policies. First, reform systems to protect multi-tasking and <a href="https://hbr.org/2016/11/what-motivates-gig-economy-workers" rel="nofollow">‘gig’ workers</a> in ways similar to traditional workers. Second, improve short-term support to better help people who lose their jobs or need transition assistance. Finally, longer-term (and more radical) solution may be needed to provide income support for when technological change might indeed end the demand for most forms of human labor.<br />
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On the positive side, technological change opens up possibilities for countries to leapfrog and adopt more advanced technologies such as biometric identification for social programs (as in <a href="http://pubdocs.worldbank.org/en/655801461250682317/WDR16-BP-Aadhaar-Paper-Banerjee.pdf" rel="nofollow">India</a>), or drones for medical delivery rather than by road (as in <a href="http://www.theverge.com/2016/4/5/11367274/zipline-drone-delivery-rwanda-medicine-blood;%20http:/www.digitaltrends.com/cool-tech/zipline-rural-medical-drone-delivery/" rel="nofollow">Rwanda</a>). Even with these adoptions, emerging economies may miss new digital opportunities to participate meaningfully in global e-commerce. And if businesses in advanced economies upgrade, they could accelerate re-shoring, cutting off the possibility of emerging economies benefiting from the shifting of jobs or tasks in manufacturing or services. Without the traditional pathways for growth and job-creation in place—such as exports, manufacturing, and the transformation of agriculture to industrial activity—it is unclear where the jobs for the millions of young people across Asia and Africa will come from.<br />
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The challenge for society is not technological change per se but rather, the risk that some individuals—especially those in the bottom 40—might bear a disproportionate part of the costs of any transitions in skills demanded, or as the nature of work changes.<br />
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<em>Follow the World Bank Jobs Group on Twitter <a href="http://www.twitter.com/wbg_jobs" rel="nofollow">@wbg_jobs</a></em></p>
Wed, 30 Nov 2016 14:07:00 -0500سيدارثا راجاShould developing countries increase their minimum wages? Guest post by Andrés Hamhttp://blogs.worldbank.org/impactevaluations/should-developing-countries-increase-their-minimum-wages-guest-post-andr-s-ham
In the closing scene of Christopher Nolan’s <em>The Dark Knight</em>, Police Commissioner Gordon tells his son that Batman is “the hero Gotham deserves but not the one it needs right now” (<a href="https://www.youtube.com/watch?v=6c_H45kt1_8" rel="nofollow">video</a>). This quote provides an interesting policy analogy with minimum wage increases. The benefits of raising minimum wages are something we believe workers deserve: better pay. Unfortunately, the costs tend to involve higher unemployment, which no country needs right now.<br />
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There is an extensive literature in developed countries that studies minimum wage hikes. This research has found higher minimum wages can lead to job losses, no effect on jobs, or even job growth (<a href="https://mitpress.mit.edu/books/minimum-wages" rel="nofollow">Neumark and Wascher 2008</a> provides one of many reviews). Minimum wages in developing countries tend to be set higher, are less likely to be rigorously enforced, and labor markets are often segmented into formal and informal sectors with minimum wage policy only covering formal workers. Given these differences and that most developing countries implement minimum wage policies, understanding their consequences on labor markets is critical for economic growth, developing effective labor policy, and poverty alleviation.<br />
&nbsp;<br />
My <a href="http://publish.illinois.edu/andresham/files/2016/11/JMP_NOV132016.pdf" rel="nofollow">job market paper</a> studies the impact of minimum wage policy on labor market outcomes and poverty in Honduras from 2005-2012 using repeated cross-sections of household survey data. The attributes of Honduran minimum wage policy and its labor market are similar to many developing countries, so the resulting conclusions from this case study may extend beyond its borders.<br />
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<strong>The empirical problem and my solution</strong><br />
Determining whether the benefits of minimum wages offset their costs is more complicated than it seems. The difficulty arises because minimum wage increases are endogenous, set in response to previous economic conditions that also affect earnings and employment such as growth or recession, inflation, and changing demand for goods and services over time. Most minimum wage studies in developing countries avoid endogeneity problems by exploiting a source of exogenous variation, often due to a policy change or natural experiment. While the majority of them use a single minimum wage shock for identification, I am able to employ a strategy that exploits multiple sources of variation: annual reforms to minimum wages, a large average increase, and institutional changes in the number of minimum wages.<br />
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Honduras sets multiple minimum wages that differ across region, industry, and firm-size categories. The category-level structure is my main source of variation, which exploits different rates of change across categories (much like using state-level differences in the US). Three events affect these rates of change from 2005-2012. First, annual reforms to minimum wages provide variation over time. Second, President Manuel Zelaya raised average real minimum wages by 60 percent in 2009. His intention was to equalize minimum wages across categories. The amount of the increase was unexpected, unrelated to aggregate economic conditions, and uncorrelated to previous electoral outcomes. Last, the number of minimum wages changed from 23 industry firm-size categories in 2005-2008 to 2 urban/rural categories in 2009, then to 6 urban/rural and firm-size categories in 2010, before permanently returning to a structure with 37 industry firm-size categories in 2011.<br />
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Real hourly minimum wages in this period went from US$0.70 in 2005 to US$1.26 in 2012, and are within range of more than thirty <a href="https://en.wikipedia.org/wiki/List_of_minimum_wages_by_country" rel="nofollow">developing countries</a>. On average, Honduran minimum wages increased by 10.8 percent over this period, but variation across the 23 initial categories includes declines of -11.1 percent (because of inflation) and increases as high as 204.5 percent, as Figure 1 shows.<br />
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Figure 1: Annual variation across minimum wage categories<br />
<img alt="" height="400" src="https://blogs.worldbank.org/impactevaluations/files/impactevaluations/figure_1_0.jpg" title="" width="550" /><br />
I employ a difference-in-differences strategy that compares individuals in high vs. low minimum wage categories over time. After controlling for covariates, category fixed effects, and time dummies, all remaining within-category variation over time is plausibly exogenous and identifies the net effect of minimum wage hikes.<br />
&nbsp;<br />
<strong>Results</strong><br />
I find that a 10 percent increase in minimum wages reduces employment rates by about 1 percent. Because this result lumps formal and informal sectors together, it disguises the real effect: a significant change in labor force composition. The same minimum wage hike lowers the likelihood of employment in the formal sector by about 8 percent and increases the probability of employment in the informal sector just over 5 percent. The data indicate that individuals substitute wage earning jobs for self-employment as a direct consequence of minimum wage hikes. Wages in the formal sector increase but the observed influx of workers towards the informal sector leads to a negative net effect on informal sector wages. Figure 2 depicts these results.<br />
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Figure 2: Labor market effects of minimum wages in Honduras<br />
<img alt="" height="308" src="https://blogs.worldbank.org/impactevaluations/files/impactevaluations/figure_2_0.jpg" title="" width="550" /><br />
Since informal sector jobs tend to be lower-paid part-time positions, average earnings in this sector often lie below formal sector incomes. Hence, there may be an adverse effect on individual well-being from these observed changes in labor force composition. To approximate the welfare effect of minimum wages, I estimate whether minimum wage increases help workers escape from extreme poverty. I find that a 10 percent increase in minimum wages has a negative but statistically insignificant effect on the risk of extreme poverty for the formal labor force. The same minimum wage hike significantly raises the risk of extreme poverty for the informal workforce by around 4 percent. This result indicates that on balance, higher minimum wages increase poverty.<br />
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I also find evidence that more formal workers are being paid less than the minimum wage. This occurs despite formal employers’ legal obligation to comply with minimum wages. Some non-compliance has always been observed in developing countries, mostly in response to imperfect enforcement from regulators (<a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1564-913X.2013.00197.x/abstract" rel="nofollow">Rani et al. 2013</a>). In Honduras, about one in three formal workers earns sub-minimum wages. As minimum wages increase, so does the level of non-compliance. I estimate that about 36 percent more formal sector workers, who should be receiving minimum wages, are underpaid by their employers.<br />
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These results are robust to alternative estimation procedures and when including linear category-specific trends to account for heterogeneous time effects across categories as well as relaxing the parallel trends assumption (<a href="http://ftp.iza.org/dp7638.pdf" rel="nofollow">Allegretto et al. 2013</a>). I also aggregate the data to the category-level and obtain similar but insignificant estimates due to a loss of power (as shown by <a href="http://qje.oxfordjournals.org/content/119/1/249.abstract" rel="nofollow">Bertrand et al. 2004</a>). &nbsp;One drawback of my study is that I cannot observe the same individuals over time. Panel data would help track worker flows and allow estimating a structural or behavioral model. Another limitation is that measurement error in the surveys could impact my results but predicting the direction of any response bias is problematic.<br />
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<strong>Policy Implications</strong><br />
My findings imply that the costs of minimum wage increases outweigh their benefits in developing countries. The policy implication is that setting high minimum wages has detrimental effects on labor markets, well-being, and compliance. While Honduran minimum wage policy is unlikely to offer a template for other nations, it provides a cautionary tale. Raising minimum wages may significantly alter the landscape of the labor market. To fully determine the policy’s long-term consequences, we need to better understand the informal economy. Jobs in this sector range from street vendors to moto-taxi drivers. Because informal activities are becoming more commonplace across the developing world, we must learn why people enter this sector and the consequences of participating in such activities.<br />
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This evidence acknowledges that minimum wage policies in developing countries may not provide what workers deserve or need. However, knowing its flaws can helps us steer this labor policy towards the goals we would like it to accomplish. Even Batman has occasionally <a href="http://www.dorkly.com/video/76737/9-times-batman-broke-his-one-rule" rel="nofollow">changed his own approach</a>.<br />
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<em>Andrés Ham is a Ph.D. candidate in Agricultural and Applied Economics at the University of Illinois Urbana-Champaign. His website can be found&nbsp;</em><a href="http://publish.illinois.edu/andresham/" rel="nofollow"><em>here</em></a><em>.</em><br />
&nbsp;Mon, 28 Nov 2016 07:01:00 -0500Development Impact Guest BloggerImproving fairness, opportunity and empowerment: A view from the South Caucasushttp://blogs.worldbank.org/europeandcentralasia/race-top-view-south-caucasus
I was&nbsp;quite&nbsp;intrigued&nbsp;by the&nbsp;findings of the latest <a href="http://www.worldbank.org/en/region/eca/publication/europe-and-central-asia-economic-update" rel="nofollow">Europe and Central Asia Economic Update</a>, with&nbsp;its special focus on "Polarization and Populism".&nbsp;As Program Leader for the South Caucasus region, covering Azerbaijan, Armenia and Georgia, I was particularly&nbsp;interested&nbsp;in the fact&nbsp;that these three countries report the highest levels of&nbsp;life and job dissatisfaction, despite declining disparities and overall income improvement in the region (in Georgia, for instance). Indeed, using the World Bank’s "twin goal” metrics, the South Caucasus region has been performing reasonably well.<br />
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<img alt="ECA Economic Update" height="439" src="https://blogs.worldbank.org/europeandcentralasia/files/water/chart-eca-econ-update-genevieve.jpg" title="ECA Economic Update" width="780" /></div>
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Our Chief Economist for Europe and Central Asia, Hans Timmer,&nbsp;concludes the Economic Update with a reference to "anxiety" (an interesting word to&nbsp;join our economic jargon). Perception of inequality of opportunities (close to perception of “unfair”) drags down our countries’ moral, and the sentiment that, after all, there is little than one can do to improve his/her own life. Even worse, few people believe that life will improve significntly for their children. Routine manufacturing jobs are decreasing, and economic mobility&nbsp;remains low.<br />
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Adding to this that, by 2050, Georgia's population is expected to reduce by half a million, while Armenia's is expected to reduce by around 300,000, leading us to a somewhat gloomy picture. We don’t have comparable poverty and inequality data yet for Azerbaijan, but we know the country is facing extremely tough times, and that the modest expected oil price recovery next year will not be the solution to break the pattern of dissatisfaction.<br />
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The stabilization/restructuration/diversification agenda in the country is daunting, for <a href="http://www.worldbank.org/en/region/eca/publication/golden-aging" rel="nofollow">a growing - yet aging population</a>. So this suggests that the twin goals are not sufficient. Maybe it is not all about being “richer”, after all, even though this is key in the equation. In my view, it is also about perceptions, expectations, fairness, empowerment, voice and the ability to take actions.<br />
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Hence the question: can I take actions today that I trust will improve my quality of life, and that of my children, in the future? As the Europe and Central Asia Economic Update points out, the jobs agenda and redistribution targeted at improving equal and increasing opportunities should be placed front and center in our work at the country level.<br />
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However, in a world where competition and technological progress force us to be ever more innovative, and&nbsp;where more educated people enter the job market every day, the challenge also goes above and beyond national policies, calling for international coordination to stop free-riding and negative externalities. For example,&nbsp;free-riders of globalization&nbsp;include those mastering tax “optimization”, but really avoiding paying taxes where due.<br />
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Why is supra-national coordination so crucial? The answer is simple: because we are all in the same boat, and global competition without global regulations might well mean a race to the bottom.<br />
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<a href="http://www.oecd.org/tax/global-forum-makes-advances-on-the-international-tax-transparency-agenda.htm" rel="nofollow">The Global Forum on Tax Transparency and Exchange of Information</a>, hosted&nbsp;two weeks ago in Georgia with 140 delegate countries, IMF, OECD, EU, WBG, and UN, is a response in the right direction. Georgia has joined the <a href="http://www.oecd.org/ctp/beps/" rel="nofollow">Base Erosion and Profit Shifting</a>, “BEPS” Inclusive Framework, which seeks to deter aggressive large taxpayers operating in several countries arbitrate across tax systems to minimize payments. So, the country is now committed to implementing the minimum standards by 2020.<br />
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Another example is the most recent <a href="http://unfccc.int/meetings/marrakech_nov_2016/meeting/9567.php" rel="nofollow">Marrakech Climate Change Meetings.</a>&nbsp;These initiatives reveal the true price tag of free-riding and not coordinating at the global level (you might think you win as an individual, corporate, country, government, but this is short-sighted: at the collective, global level, we might all loose by acting individually (think of global warming, but also the global erosion of taxes which further weakens global and national public policies in a vicious circle).<br />
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If we - people, corporations, civil society, governments - commit to global coordination initiatives of the same spirit, I am hopeful that it could become a race to the top. So we can all believe that the future will be brighter for ourselves and our children.&nbsp;Fri, 25 Nov 2016 02:58:00 -0500Genevieve BoyreauHow do we measure jobs?http://blogs.worldbank.org/jobs/how-do-we-measure-jobs
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Jobs and Development Conference: Interview with Alvaro Gonzalez </strong>
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<p>
Jobs are key to ending poverty and development practitioners, policymakers, academics, and business leaders agree that measuring jobs is important. While data on the number of jobs being created is important, it only tells a small part of the story.</p>
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Other components such as the quality of the job, who gets the job, and the types of firms that are hiring are also valuable factors to consider. The World Bank Jobs Group has been working through the <a href="https://letswork.org/" rel="nofollow">Let’s Work Partnership</a> to develop standardized methods for estimating job effects that can be used by project teams.&nbsp; We spoke with Alvaro Gonzalez, Principal Economist of the Jobs Group, to understand how jobs are currently being measured, the difficulties in estimating job creation, and the way forward for this important agenda.<br />
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<em>This post is part of a series of blogs covering key themes from the&nbsp;<a href="http://jobsanddevelopmentconference.org/" rel="nofollow">Jobs and Development Conference</a>, hosted by the World Bank Jobs Group and the&nbsp;<a href="http://www.worldbank.org/en/topic/jobsanddevelopment/brief/network-on-jobs-and-development" rel="nofollow">Network on Jobs and Development</a>. Related blogs in this series can be found&nbsp;<a href="https://blogs.worldbank.org/jobs/government-and-jobs-new-consensus" rel="nofollow">here</a>&nbsp;and <a href="https://blogs.worldbank.org/jobs/south-asia-link-between-location-quality-and-growth-job-creation" rel="nofollow">here</a>.&nbsp;</em><br />
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<em>Follow the World Bank Jobs Group on Twitter&nbsp;<a href="http://www.twitter.com/wbg_jobs" rel="nofollow">@wbg_jobs</a>.&nbsp;</em></p>
Tue, 22 Nov 2016 09:56:00 -0500Sonia Madhvani“Your Ex Knows Best” - The Value of Reference Letters: Guest Post by Martin Abelhttp://blogs.worldbank.org/impactevaluations/your-ex-knows-best-value-reference-letters-guest-post-martin-abel
<p>
<em>This is the first in our series of posts by Ph.D. students on the job market this year.</em><br />
One of the key challenges of markets is to assess the quality of goods. A look at online dating websites – a market where information asymmetries loom particularly large - shows different ways in which people try to communicate that they are of “high quality”. A common strategy is to start your introduction with “<em>My <strong>friends</strong> describe me as…</em>” (to be followed by some glowing testimony “…smart, athletic, high-achieving – yet humble”). Why may this strategy not be effective? It raises questions about whether these friends are truthful and whether they have all the relevant information about your quality as a partner. The really interesting question you never see answered is: “<em>How would your <strong>ex-partner</strong> describe you?”</em><br />
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My job market paper “<a href="http://scholar.harvard.edu/files/abel/files/abel_jmp_reference_letters.pdf" rel="nofollow"><em>The Value of Reference Letters</em></a>”, coauthored with <a href="http://www.ekon.sun.ac.za/rulofburger" rel="nofollow">Rulof Burger</a> (SU) and <a href="https://sites.google.com/site/pirainop/" rel="nofollow">Patrizio Piraino</a> (UCT), is about the challenges hiring firms face in identifying high-quality applicants. While the literature has largely focused on the role of friends and family members (<a href="https://www.researchgate.net/publication/251467909_Labor_Markets_and_Referrals" rel="nofollow">Topa 2011</a>, <a href="http://www.jstor.org/stable/41724646" rel="nofollow">Beaman and Magruder 2012</a>) in job referrals, we investigate whether information from ex-employers can facilitate the matching process. Specifically, we test the effect of a standardized reference letter asking previous employers to rate workers on a range of hard skills (e.g. numeracy, literacy) and soft skills (e.g. reliability, team ability).</p>
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<p>
In many developing countries, firms struggle to identify capable candidates given their lack of expertise in screening and the fact that educational credentials are perceived to be weak signals of productivity. As a result, a majority of firms hires through <em>informal</em> channels. Why could this be a problem? For one, it may adversely affect match quality as it limits the pool of potential applicants (<a href="http://www.jstor.org/stable/1821319" rel="nofollow">Rees 1966</a>). Second, it exacerbates (gender) inequity: in South Africa and many other countries women have less access to informal referral networks (<a href="http://www.jstor.org/stable/25760193" rel="nofollow">Magruder 2010</a>, <a href="http://pitdss.gspia.pitt.edu/Portals/11/PDFs/BKM_recruitment_feb2013.pdf" rel="nofollow">Beaman et al. 2013</a>). &nbsp;&nbsp;<br />
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We conducted a series of field experiments with unemployed youth in townships surrounding Johannesburg, South Africa to answer three questions: 1) Are reference letters valuable? 2) Why are they valuable? 3) Why are they not more widely adopted?<br />
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<strong><em>Are Reference Letters Valuable?</em></strong><br />
First, we encourage 430 job seekers to ask a former employer to complete our reference letter template. We submit applications for the 31% of participants who return the completed letter; specifically, we send applications to online vacancies with and without the reference letters and compare firm responses. We find that the reference letters increase firm responses by about 60% (from 4.2 to 6.5%). Women, traditionally excluded from many referral networks, particularly benefit: reference letters increase firm responses by 89% (although this gender difference is not statistically significant).<br />
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<img alt="" height="321" src="https://blogs.worldbank.org/impactevaluations/files/impactevaluations/abel_blog_reflet_pic_cropped.jpg" title="" width="550" /><br />
<em>Example of the standardized template</em><br />
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While letters are valuable when submitted by us, their effectiveness may differ when job seekers use them in their search. To see whether this is the case, we conduct a second field experiment with a sample of 1,267 job seekers, in which we encourage half of the participants to obtain a letter and subsequently follow their job search behavior and employment outcomes. After three months we find similar results: men are not more likely to find jobs, but employment rates for women who have reference letters double (from a base of 11.7%), thus fully closing the employment gender gap in our sample.<br />
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<strong><em>Why Are Reference Letters Effective?</em></strong><br />
To understand why reference letters are effective, we then test several additional questions. For one, do reference letters actually contain information that is both truthful and novel? We find that “subjective” employer ratings for numeracy and literacy are highly correlated with “objective” results from an aptitude test (for both female and male job seekers), even after we control for characteristics like age, education and school grades that are easily observable to firms.<br />
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We then test whether firms actually use this information or whether they just respond to the fact that a job seeker is able to obtain and correctly use a reference letter. While we find that more positive letters are more effective for getting job interviews, letters in which the former employer gives the highest rating in <em>every</em> category are completely ineffective and may even reduce chances of getting an interview (despite the fact that job seekers with these glowing reference letters perform very well in the aptitude test). This highlights the importance of signal credibility. Interestingly, the content of letters from <em>female</em> job seekers matters more, suggesting that firms are more uncertain about their ability.<br />
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Do reference letters lead to an overall increase in employment or are we just reshuffling the queue of job seekers? We find that attaching a letter increases the correlation between job seekers’ aptitude and firm responses by a factor of four, suggesting that firms are able to identify more productive candidates. The ability to hire more capable applicants may induce firms to increase their demand for workers (<a href="http://www.jstor.org/stable/2297896" rel="nofollow">Mortensen Pissarides 1994</a>). However, the study design does not allow to conclusively test for these (general equilibrium) effects.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br />
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<strong><em>Why are Reference Letters not more widely adopted?</em></strong><br />
In light of these results, one might ask why reference letters are not more prevalent. Data suggests that it is not due to the unwillingness of previous employers to provide letters: among participants that approach a former employer, 73.6% succeed in having the template completed. If former employers are willing to write letters and hiring firms use the information in the screening, then the “culprit” must be the job seeker.<br />
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We conduct a third experiment that tests two potential explanations for why job seekers do not ask for reference letters: they may underestimate their potential value or they may procrastinate in getting letters. After job seekers visited the job center they are randomly assigned to receive a i) reminder to return the letter, ii) a monetary incentive (half a daily wage) or iii) information on the effectiveness of letters. We find that the information treatment increases take-up (by about 65%) while the monetary incentive has no effect, suggesting that job seekers underestimate the potential value of reference letters.<br />
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<strong><em>Open Questions</em></strong><br />
While our study looks at the effects of reference letter in a static framework, reducing information asymmetries may also have dynamic effects. In ongoing work, I explore whether workers exert more effort on the job when they know they receive a reference letter. This could boost worker productivity beyond improvements in job matching explored in this study.<br />
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Despite these findings, it remains an open question whether reference letters improve welfare; high ability job seekers <em>without</em> previous work experience may struggle to get a foot in the door as hiring managers prefer applicants with letters. Reference letters may become an entry barrier and thus reduce market efficiency (<a href="http://scholar.harvard.edu/pallais/files/inefficient_hiring.pdf" rel="nofollow">Pallais 2014</a>).<br />
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So does your ex know better than your friends? As economists we believe that there must be reason why in many countries (including South Africa) the majority of workers are hired through informal networks rather than formal hiring channels. Our study identifies market frictions that <em>could</em> explain why the common hiring practice may be sub-optimal. A simple intervention reducing information frictions shows promising results. Yet, the jury is still out. In ongoing work, I hope to shed light on this important question by comparing the performance of workers hired through different channels. &nbsp;&nbsp;&nbsp;<br />
<strong>Martin Abel</strong> is a PhD Student at Harvard University. You can find his website <a href="http://scholar.harvard.edu/abel" rel="nofollow">here</a>.<br />
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Sun, 20 Nov 2016 16:56:00 -0500Development Impact Guest BloggerPeople’s living standards – do numbers tell the whole story?http://blogs.worldbank.org/europeandcentralasia/people-s-living-standards-do-numbers-tell-whole-story
<em>Co-authored by </em><em>Maria Davalos and Indhira Santos </em><br />
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Numbers don’t lie. That’s why, in our day-to-day lives, we rely heavily on numbers from household surveys, from national accounts, and from other traditional sources to describe the world around us: to calculate, to compare, to measure, to understand economic and social trends in the countries where we work.<br />
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But do we perhaps rely too much on numbers to gain an understanding of people’s lives and the societies in which they live? Do numbers really tell us the whole story, or give us the full picture?<br />
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<img alt="Photo by Jutta Benzenberg, copyright World Bank" height="370" src="https://blogs.worldbank.org/europeandcentralasia/files/water/voices-blog-2.jpg" title="Photo by Jutta Benzenberg, copyright World Bank" width="600" /><br />
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These questions came up recently when we were trying to understand changes over time in the welfare and living standards of people and communities across the <a href="http://www.worldbank.org/en/region/eca" rel="nofollow">Europe and Central Asia</a> region. In our studies, we looked at the growth of the “bottom 40 percent”, trends in poverty rates, and GINI using household surveys – indicators that painted an overall positive picture of performance throughout the 2000s. For instance, the numbers told us that the share of people living in extreme or moderate poverty declined from almost half in 2000 to 14 percent in 2013; and that the middle class more than doubled between 2003 and 2013.<br />
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So, the message is very positive, right?<br />
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Not quite. We felt something was missing from the picture, and decided to look beyond the numbers. We agreed, therefore, to ask people what they themselves thought and felt about their own welfare and living standards.<br />
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What we heard from selected men and women across the region told us that traditional indicators do not fully reflect the reality on the ground. Indeed, recent qualitative research in 43 communities across 9 countries reveals that there is a lot of discontent, even in countries that have been growing fast. <a href="http://documents.worldbank.org/curated/en/574541468197406913/Why-so-gloomy-perceptions-of-economic-mobility-in-Europe-and-Central-Asia" rel="nofollow">Similar insights</a> have been obtained from the Life in Transition Survey: even in periods of growth, a large share of households in many countries in the <a href="http://www.worldbank.org/en/region/eca" rel="nofollow">Europe and Central Asia</a> region claimed that life was better before the economic transition of the 1990s.<br />
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Almost everywhere, men and women perceive that advances in living standards have been more subdued (if at all), than traditional economic indicators describe – and they feel extremely vulnerable to downward mobility. In countries growing more slowly, they worry about a disappearing middle class.<br />
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Everywhere, there is a concern about growing polarization, echoing similar concerns in other parts of the world. But what is behind this disconnect between objective measures and people’s perceptions on welfare and mobility?<br />
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We asked men and women in the Europe and Central Asia region what factors they consider to be important in order to move up the “wellbeing ladder” in their respective communities. During those discussions, three strong views were repeatedly expressed:<br />
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<strong>“It is all only about work.”</strong><br />
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The lack of (good) jobs, particularly among women and youth, is driving discontent amidst rising prosperity. But what is a good job? Only 78 percent and 47 percent of our respondents, respectively, thought that being a worker in agriculture or construction constituted a job. People have high aspirations, which make them exclude from their idea of jobs many ‘irregular’ forms of employment that are becoming increasingly common in the region.<br />
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People aspire to full-time, formal jobs with permanent contracts, and they place a high value on security and stability. As a result, close to 80 percent of the people we talked to declared they would rather work in the public than in the private sector - <em>“because those are stable jobs.”</em> Even youth tend to express a similar preference for public sector jobs, so this cannot be dismissed as a generational issue.<br />
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<strong>“Who you know matters more than what you know.”</strong><br />
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The people we spoke with in the Europe and Central Asia region perceive social and political connections, and social norms, to be crucial for accessing jobs and improving individual well-being. Yet, both goals are perceived to be outside the control of the individual, leading to frustration and perceptions of unfairness in labor markets.<br />
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Men and women alike voiced great frustration about how the lack of connections curtails their opportunities, and with the unfairness in the process of getting a job. Many agreed that, <em>“Nowadays, it’s very difficult to find a job without connections, whether through a political party or family ties.”</em><br />
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Similarly, social norms, particularly those related to gender, also mediate access to jobs. Women often referred to the need to redefine roles in the household in order to be able to look for jobs. In addition, lack of access to affordable and quality childcare limits options. Both men and women shared the widespread view that, <em>“Women have worse prospects of finding a job, because mentality, family and children prevent them from being hired.”</em><br />
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<strong>“The poor are getting poorer, and the rich are getting richer.”</strong><br />
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Men and women in the region describe societies that are increasingly polarized, with an elusive middle-class. The message that resonates powerfully through their voices is that, <em>“Those at the top, the rich ones, stay as they are, but those below are drastically different compared to 10 years ago, and we’re going downhill.”</em><br />
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Although everybody might be moving up, the fact that others are doing so more quickly affects perceptions, and therefore progress seems more modest. But there is also the view that people at the top are there not due to hard work but thanks to the fact that “<em>they are better connected</em>”, “<em>they control how the money flows</em>” and “<em>they have more opportunities</em>.”<br />
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Our study reveals a blind spot in policies aimed at improving access to more and better jobs, often because traditional indicators – on which most policies are based – do not capture the full story. Therefore, barriers such as the lack of networks and information, and social norms that keep people out of work are often ignored in the design of policy responses to the jobs challenge. And yet, they play a critical role in shaping people’s perceptions, behavior and opportunities.<br />
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Luckily, once these non-traditional barriers to jobs and mobility are diagnosed, they are actually amenable to policy. So, what can be done?<br />
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First, we can do better at connecting people to jobs. There is a growing body of evidence on interventions that work to address governance failures, especially around public employment, or information failures, by improving access to networks and information on school-to-work transitions and labor markets.<br />
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Second, we can do more to overcome social norms that limit access to economic opportunities, particularly for women. Again, evidence is building up on interventions that can make the difference. They include shifting aspirations through mentoring and role models, media campaigns, or innovative approaches involving employers, such as gender certifications and behavioral interventions to address hiring biases.<br />
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<strong>"Voices of Europe and Central Asia"</strong>, our new report (available on 14 November), reveals the perceptions and aspirations of people in the region around mobility and jobs. But, this is only part of a bigger agenda in Europe and Central Asia, and beyond. Going forward, additional qualitative work – that goes beyond the numbers – could help us better understand the implications of these aspirations for people and communities at times of rapid economic change and growing concerns about polarization.<br />
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Join our panel discussion on 14 November: <a href="http://www.worldbank.org/en/events/2016/11/04/do-numbers-tell-the-whole-story-perceptions-reality-about-prosperity-jobs" rel="nofollow">Do Numbers Tell the Whole Story? Perceptions and Reality about Prosperity and Jobs </a><br />
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<em>"Voices of Europe and Central Asia: New Insights on Shared Prosperity and Jobs"&nbsp;was funded by the </em><a href="http://www.worldbank.org/en/programs/umbrellafacilityforgenderequality" rel="nofollow"><em>Umbrella Facility for Gender Equality (UFGE)</em></a><em>, a multi-donor trust fund managed by the World Bank Group.</em><br />
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<strong>Related World Bank links:</strong>
<ul>
<li>
Europe and Central Asia: <a href="http://www.worldbank.org/en/region/eca" rel="nofollow">http://www.worldbank.org/en/region/eca</a></li>
<li>
Poverty: <a href="http://www.worldbank.org/en/topic/poverty" rel="nofollow">http://www.worldbank.org/en/topic/poverty</a></li>
<li>
Publication page: <a href="http://www.worldbank.org/en/topic/poverty/publication/voices-europe-central-asia-insights-shared-prosperity-jobs" rel="nofollow">http://www.worldbank.org/en/topic/poverty/publication/voices-europe-central-asia-insights-shared-prosperity-jobs</a></li>
<li>
Report: <a href="http://documents.worldbank.org/curated/en/372521478680637391/pdf/109964-v2-REVISED-PUBLIC-Voices-ECA-MAIN-REPORT-EN-Digital.pdf" rel="nofollow">http://documents.worldbank.org/curated/en/372521478680637391/pdf/109964-v2-REVISED-PUBLIC-Voices-ECA-MAIN-REPORT-EN-Digital.pdf</a><br />
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&nbsp;</li>
</ul>
Tue, 08 Nov 2016 10:00:00 -0500Giorgia DeMarchiCan urban slums help people work their way out of poverty?http://blogs.worldbank.org/jobs/can-urban-slums-help-people-work-their-way-out-poverty
<em>Ivan Turok, guest blogger, is Executive Director at the Human Sciences Research Council in South Africa, Editor-in-Chief of the journal ‘Regional Studies’, Honorary Professor at the University of Glasgow, and Chairman of the City Planning Commission for Durban</em>
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<img alt="" height="415" src="https://blogs.worldbank.org/jobs/files/jobs/urban-slums_0.jpg" title="" width="626" />
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The interactions between three phenomena - place, people and economy - are bound to exercise a decisive influence on whether informal settlements help or hinder human progress. Photo: Scott Wallace/ World Bank</figcaption>
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About one in three urban residents (over 900 million people) in developing markets live in informal settlements. Do these slums help lift people out of poverty by providing affordable entry points to access urban assets, services and livelihoods? Or do they confine people to enduring hardship and vulnerability in squalid and unsafe environments with little prospect of upward mobility?</p>
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We published a recent <a href="http://usj.sagepub.com/cgi/reprint/0042098016671109v1.pdf?ijkey=1anzmlCBpSdyA5K&amp;keytype=finite" rel="nofollow">paper</a> on the theory and reality of urban slums to explore which of these processes are more prevalent in practice. In particular, we looked at whether informal settlements enable people to move out of rural poverty, or confine them to insecurity and misery. Our focus is on South Africa because of the stark social and spatial inequalities, policy ambivalence towards informal settlements, and rising social unrest. We found evidence that these places do help people to get ahead, and this could shift attitudes and prompt recognition that they warrant more investment in public services.&nbsp;<br />
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The research discussed in the paper draws on data from the <a href="http://www.statsa.gov.sa/?cat=31" rel="nofollow">SA Labor Force Survey</a>. It provides clear evidence that households are better-off in informal urban areas than in rural areas, but worse-off than in formal urban areas. Less than one in three (29%) working age adults in rural areas has a job, compared with nearly half (47%) of working age adults in informal urban areas. The proportion of adults in formal urban areas with a job is 51%. This suggests quite strongly that shack settlements are a step up for former rural households in that a fair proportion of adults can access urban jobs. However, other data from the same source indicates that most shack dwellers are confined to lower-paid, manual and precarious occupations. This suggests that they struggle to progress beyond entry-level positions.<br />
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Their prospects for stronger upward mobility are hampered by sluggish economic conditions and a segmented labor market with various barriers to progression, such as low skills and poor geographical accessibility to centers of employment. The contrasting conditions of shack dwellers and formal urban residents are also among the reasons for increasing frustration and violent protests in these communities.<br />
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These ‘slums’ generally consist of makeshift dwellings, which lack basic services such as water and sanitation. Residents generally have no security of tenure, so they can be evicted at short notice. As informal settlements are likely to absorb most of the world’s population growth over the next three decades, the difference these places make to people’s chances in life is crucial to the future well-being of a large section of global humanity.<br />
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Considering the magnitude of the issues at stake, the dynamics of urban slums are surprisingly under-researched and over-sensationalized. A better understanding of the relationship between slum characteristics and personal trajectories is important, set in the context of local labor market conditions. The interactions between these three phenomena - place, people and economy - are bound to exercise a decisive influence on whether informal settlements help or hinder human progress by linking people to the opportunities concentrated in cities.&nbsp;<br />
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Without this understanding of how shack areas affect human development, all kinds of implicit assumptions and misperceptions flourish. A common stereotype is that they are no-go areas formed in hazardous places by squatters who are anti-social, uneducated and desperate. This stigma matters when held by powerful elites who target slums for eviction because they are blamed for crime and pollution.<br />
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The opposite view is that slums are sites of remarkable self-sacrifice, high hopes and resourcefulness in the face of adversity. Their social vibrancy and energy make them worthy of special policy attention.<br />
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Neither of these polarized notions recognizes that the prospects of slum dwellers are intimately bound up with the labor market context of the city, especially the rate of jobs growth. There are also contrasting perspectives on how informal settlements evolve over time. One is that slums are part of the growth pains of societies in transition that gradually disappear as living standards rise. The other is slums are permanent poverty traps that keep mushrooming inexorably.<br />
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Our provisional findings show that further research using longitudinal data is necessary. We also need to assess the extent and timescales of economic progression accompanying migration between rural and urban areas.<br />
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Thu, 03 Nov 2016 12:40:00 -0400Ivan Turok